On June 30, after losing a Supreme Court lawsuit over his $400 billion plan to pay off student loan debt, President Biden said he was going to try again.
So what exactly does he propose to do?
in a fact sheet In announcing this second attempt, the White House wrote that the Department of Education will attempt to use the authority it believes it has under the Higher Education Act of 1965. In the Supreme Court case, the Biden administration attempted to claim power under a different law, the HEROES Act.
This process is likely to take several months at a minimum, and it’s unclear how many people might be eligible for any relief the administration eventually offers.
The fact sheet contained few details, but the administration said more in a press conferencerepeatedly referring to the “compromise and compromise authority” that the education law allows.
For a more detailed explanation, I turned to lucas herrineassistant professor of law at the University of Alabama and former legal director of Collective Debt, a membership organization and advocacy group working to pay off student loan debt. He is also the author of “The Law and Political Economy of a Student Debt Jubilee”, an article published in the Buffalo Law Review in 2020.
My interview with Professor Herrine has been edited and abridged for clarity.
What is the backstory of your interest in student debt law?
I decided to go to law school as part of the long aftermath of the financial crisis. I was getting more and more politicized and disgusted with the political system, and I thought it would be helpful to go to law school to find out how the system works.
Through my work with the Debt Collective, I found the Compromise and Settlement Authority, which had been pointed out to me by other attorneys with more experience than myself. Why couldn’t this be used much more broadly? So I wrote the law review article which turned out to be very timely.
So what is the relevant legal authority here, both the phrase and its origins?
The Higher Education Act is the big statute that governs federal student loans, the authority that allows the Department of Education to issue them and create payments based on income, public service loan forgiveness, all of it.
There is a particular provision that gives the secretary of education authority to act as someone in charge of the program and pay off loans on a discretionary basis. It allows the clerk to “enforce, pay, pledge, waive, or release” the debt.
What does “commitment” mean? As a term of legal art, it means accepting a deal. Even more clearly, “resign and release” means “you no longer owe this.” That’s what the authority says.
And what was the intention of Congress with this sentence?
As far as I can tell, there was no detailed conversation here. But I think what they meant is that if we’re going to have an agency that’s going to manage the debt—people can resist paying and there are all kinds of collection issues—we need to give the agency, like a wise manager, some flexibility. .
This notion that government agencies can’t make big moves unless Congress has given them very specific permission to do so is an “important question” if I’ve ever seen one, leading to the doctrine that most members of the Supreme Court judges now fervently quote. This is an important question, right?
I don’t know if I can say that it isn’t. Clearly, the court will look askance at the breadth of any relevant authority, especially one that has not been used in this way before.
So how could the administration make this less important? I envision reduced eligibility for certain borrowers defaultwhere collection is time consuming and expensive?
I think everyone agrees that the Higher Education Act gives the clerk authority to compromise when litigating against a borrower who is already in default. And I think most people agree that before collection actions against borrowers, they would want to cut their losses.
So we may have our own doubts about the scope of the Department of Education’s authority now, but we may focus our repayment efforts on the borrowers we think we’re going to have trouble collecting. Maybe they’ve been paying for 25 or 30 years, or they’re over a certain age. I can imagine a number of these categories.
Has the White House asked your advice?
If they did, would you tell the people there that I “told you so” about the fact that maybe they should have tried this compromise-and-fix-first tactic?
I think a wiser decision would have been to start canceling the debt without requiring any request from the debtors and then challenge the court to reimpose the balances.
What I think we all agree on is that the court is skeptical of any assertion by the administrative authority, so you have to think about that, rather than just thinking about how to convince them.
Several years ago you wrote the following at a Roosevelt Institute report: “The lack of a determined response in the current law must be seen as an opportunity, not as an obstacle.”
But, as of the recent debt cancellation ruling, don’t we effectively have a determinate answer as to how the Supreme Court would rule on what would likely be an inevitable lawsuit over any reading of the Higher Education Act like the one just filed? described? I mean, why bother trying?
My feeling is that Biden wants to run, at least partially, for re-election on this and be a little confrontational with the court and claim that what he did was illegitimate and we’re trying to do it again. Political pressure during the campaign and ongoing investigations in the Supreme Court could make the court more hesitant.
But even if they lose again, there are precedents. Many members of Congress draw on the wisdom of canceling student debt in their campaigns. The more these things become part of the Democratic Party, the more likely we are to get better legislative action.